Paragraph numbers below are the court’s original numbering, recovered from the source text.
37. Section 4 of the Act provides for the registration of societies: "Section 4- Societies which may be registered – A society, which has as its object the promotion of the economic interests or general welfare of its members or of the public, in accordance with co-operative principles, or as society established with the object of facilitating the operations of any such society, may be c registered under this Act: Provided that it shall not be registered if, in the opinion of the Registrar, it is economically unsound, or its registration may have an adverse effect upon any other society, or it is opposed to, or, its working is likely to be in contravention of public policy."
38. A conjoint reading of all the provisions under the Act and the Bye-laws of the Society would clearly show that the functional authority of the first respondent- E Federation vests in the Board of Directors. The entire administration, management and control of the Federation is with the Board. Thus, the Board of Directors is bound to do all such acts and things as may be necessary for the proper management of the Federation. The Chairperson of F the first respondent is elected by the Board for a term of three years and after the 97'h Amendment to the Constitution, the term is five years. When the post of Chairperso" falls vacant, the Board is bound to elect a new Chairperson for the remaining term. The post of G Chairperson may fall vacant on account of variety of reasons like resignation, death or cessation of membership in the Board, operation of Section 76B of the Act, i.e., removal by the Registrar on account of persistent default or niisconduct. VIPULBHAI M. CHAUDHARY v. GUJARAT COOP. MILK 1027 MARKETING FED. LTD. [KURIAN, J.]
39. The removal by no confidence is not expressly A provided in the Bye-laws. Neither is there any such provision in the Act or Rules. The only enabling provision is Bye-law 18.2 which mandates that in case the office of the Chairperson of the Federation falls vacant before the expiry of his term for any reason, the Board has to elect B a new Chairperson for the remaining term.
40. Shri Kapil Sibal, learned Counsel appearing for the appellant, inviting reference to the doctrine of casus omissus and placing reliance on the Full-Bench decision C of the High Court of Kerala in S. Lakshmanan, President. Thiruvilwamal Weavers Co-operative Society v. V.Velliankeri, Member of Board of Directors. Thiruvilwamala Weavers Co-operative Society Ltd. and others 10 and the decisions of. the other High Courts D submits that no such power of removal of the Chairperson by no confidence can be read into the provisions of the Act, · Rules or Bye-laws. To quote from S. Lakshmanan case (supra) : "16. The Committee is elected by following the procedure prescribed under the Act and the Rules and is guaranteed a tenure as prescribed in the Bye-laws, by virtue of Rule 39(1). It can only be removed by the procedure prescribed in the Act or the Rules or the F Bye-laws. The only contingency under which the Committee may be removed before the end of its tenure is indicated in Section 33(1) of the Act. Section of the Act envisages the passing of a no- confidence motion by the General Body which results G in wholesale removal of the Committee. Barring this provision, there is no other provision by which an elected individual member of the Committee. can be 10 AIR 2002 Kerala 325 [2015) 3 S.C.R. removed. We are, therefore, unable to accept the contention of the appellants that such a drastic power can be read into the Act, even where there are no provisions …. "
41. In Veeramachaneni Venkata Narayana v. The c ,Deputy Registrar of Co-operative societies. Eluru, West Godavari District and others11 , at paragraphc10, the view taken by the High Court of Andhra Pradesh, is as under: "10. … As sufficient safeguards are provided in the event of an office-bearer of the committee not conducting himself properly or not discharging his duties as required of him under the provisions of the Act, the Rules and the bye-laws, the Legislature obviously did not intend to provide for the removal of an office-bearer of a committee by way of passing of 'no-confidence' motion against him."
42. In Hindurao Balwant Patil and another v. Krishnaro Pashuram Patil and others12, the High E Co1,.1rt of Bombay took the view that: "10 …. The Act, Rules and the bye-laws do no confer any right upon the members of the Board of Directors to remove the Chairman and the Vice-Chairman by passing a mere vote of no confidence. Therefore it will not be proper to confer such a wider power upon.the board of directors by taking recourse to the doctrine of implied or inherent power."
43. In Jagdev Singh v. The Registrar, Co-operative G Societies. Haryana and others13, the Full-Bench of High 11 l:L.R. [1975] A.P. 242 12 AIR 1982 Bombay 216 H 13 AIR 1991 p & H 149 VIPULBHAI M. CHAUDHARY v. GUJARAT COOP. MILK 1029 MARKETING FED. LTD. [KURIAN, J.] Court of Punjab and Haryana held as follows: "22 ….. the answer to the question posed in the beginning of the judgment, is that in absence of any provision in the Punjab Co-operative Societies Act, 1961, Rules and the Bye-laws made thereunder (as B also in the Haryana Cooperative Societies Act, 1984, Rules and the Bye-laws made thereunder) for moving a no-confidence in the President of a Managing Committee/ Chairman of a Board of Directors of a Co- operative Bank, it is not permissible to move such a C motion, inasmuch as such a power cannot be inferred nor such a power is inherent in the members of the Managing Committee/Director of the Bank. The Office bearers can only be removed in accordance with Section 27 of the Act read with Rules 25 and 26 of D the Rules. With respect we are unable to agree with the law laid down by the Division Bench in Haji Anwar Khan's case (AIR 1980 Punjab & Haryana 306) (supra) (which was a case under the Wakf Act), to our mind, does not lay down correct law."
44. It rnay be seen that all these decisions dealt with the pre-Ninety Seventh Amendment status of the cooperative societies. The amendment providing . constitutional status to the societies· has brought out radical F changes in the concept of cooperative societies. Democratic functioning and autonomy have now become the core constitutional values of a cooperative society. Such societies are to be registered only if they are founded on cooperative principles of democracy, equality, equity G and solidarity.
45. We may also refer to another argument by Shri Sibal. That once the Act provides for a fixed term, the only mode of unsettling the term is as provided under the Act. H (2015] 3 S.C.R. A In the instant case, it is Section 768 of the Act, which reads as follows: "76B. Removal of officer. – (1) If, in the opinion of the Registrar, any officer makes persistent default or is negligent in performance of the duties imposed on him by this Act or the rules or the bye-laws or does anything which is prejudicial to the interests of the Society or where he stands disqualified by or under this Act, the Registrar may, after giving the officer an opportunity of being heard, by order remove such officer and direct the Society to elect or appoint a person or a qualified member in the vacancy caused by such removal and the officer so elected or appointed shall hold office so long only as the officer in whose place he is elected or appointed would have held if the vacancy had not occurred.· (2) The Registrar may, by order, direct that the officer so removed shall be disqualified to hold or to contest election for any office in the society from which he is removed and in any other society for a period not exceeding four years from the date of the order and such officer may stand disqualified accordingly."
46. The provision simply deals with removal for misconduct or persistent default/non-performance. A person with good conduct may still not earn the confidence of the people who selected him to the office. The very concept of cooperation is to work jointly towards the same G end. Unless there is cooperativeness among the elected cooperators who constitute the Governing Body for achieving the object for which the society is constituted and for which those representatives are elected by the members entrusting them with the management of affairs H of the society, there will be total chaos. Cooperation among VIPULBHAI M. CHAUDHARY v. GUJARAT COOP. MILK 1031 MARKETING FED. LTD. [KURIAN, J.] the cooperators is the essence of democratic functioning A of a cooperative society. If there is no democracy in a cooperative society, it ceases to be a cooperative society as conceived by the Constitution of India under the Ninety Seventh Amendment.
47. There is no quarrel with the wellcsettled proposition that a right to elect is not a fundamental right nor a common law right; it is a statutory right, and any question relating to election has to be resorted within the four corners of the Act as held by this Court in Jyoti Basu and c others v. Debi Ghosal and others14. To quote paragraph- 8: "8. A right to elect, fundamental though it" is to democracy, is, anomalously enough, neither a 0 fundamental right nor a common law right. It is pure and simple, a statutory right. So is the right to be elected. So is the right to dispute an election. Outside of statute, there is no right to elect, no right to be el_ected and no right to dispute an election. Statutory E creations they are, and therefore, subject to statutory limitation. An election petition is not an action at common law, nor in equity. It is a statutory proceeding to which neither the common law nor the principles of equity apply but only those rules which the statute F makes and applies. It is a special jurisdiction, and a special jurisdiction has always to be exercised in accordance with the statute creating it. Concepts familiar to common lawand equity must remain strangers to election law unless statutorily embodied. G A court has no right to resort to them on considerations of alleged policy because policy in such matters as those, relating to the trial of election 14 (1982) 1 sec e91 c disputes, is what the statute lays down. In the trial of election disputes, court is put in a strait-jacket. Thus the entire election process commencing from the issuance of the notification calling upon a constituency to elect a member or members right up to the final resolution of the dispute, if any, concerning the election is regulated by the Representation of the People Act, 1951, different stages of the process being dealt with by different provisions of the Act. There can be no election to Parliament or the State Legislature except as provided· by the Representation of the People Act, 1951 and again, no such election may be questioned except in the manner provided by the Representation of the People Act. So the Representation of the People Act has been held to be a complete and self-contained code within which must be found any rights claimed in relation to an election or an election dispute. We are concerned with an election dispute. The question is who are parties to an election dispute and who may be impleaded as parties to an election petition. We have already referred to the scheme of the Act. We have noticed the necessity to rid ourselves of notions based on common law or equity. We see that we must seek an answer to the question within the four corners of the statute. What does the Act say?"
48. In the background of the constitutional mandate, the question is not what the statute does say but what the G statute must say. If the Act or the Rules or the Bye-laws do not say what they should say in terms of the Constitution, it is the duty of the court to read the constitutional spirit and concept into the Acts. : .. "In so far as in its Act Parliament does not convey its intention H clearly, expressly and completely, it is taken to require the VIPULBHAI M. CHAUDHARY v. GUJARAT COOP. MILK 1033 MARKETING FED. LTD. [KURIAN, J.] enforcement agencies who are charged with the duty of A applying legislation to spell out the detail of its legal meaning. This may be done either- (a) by finding and declaring implications in the words used by the legislator, or (b) by regarding the breadth or other obscurity of the express language as conferring a delegated legislative B power to elaborate its meaning in accordance with public policy (including legal policy) and the purpose of the legislation"15.
49. The conventional view is that the legislature alone C makes the law. But as Bennion puts it: "The truth is that courts are inescapably possessed of some degree of legislative power. Enacted legislation lays down rules in advance. The commands of o Parliament are deliberate prospective commands. The very concept of enacted legislation postulates an authoritative interpreter who operates ex post facto. No such interpreter can avoid legislating in the course of exercising that function. It can be done by regarding E the breadth or other obscurity of the express language as conferring a delegated legislative power to elaborate its meaning in accordance with public policy (including legal policy)"16.
50. According to Donaldson J.: ''The duty of the courts is to ascertain and give effect to the will of Parliament as expressed in its enactments. In the performance of this duty the judges G 15 Bennion on Statutory Interpretation by Francis Bennion, 6'h Edition, p.136. 16 Bennion on Statutory tnterpretation by Francis Bennion, 6th Edition, p.137. H c (2015] 3 S.C.R. do not act as computers into which are fed the statues and the rules for the construction of statues and from whom issue forth the mathematically correct answer. The interpretation of statutes is a craft as much as a science and the judges, as craftsmen, select and apply to the appropriate rules as the tools of their trade. They are not legislators, but finishers, refiners and polishers of legislation which comes to them in a state requiring varying degrees of further processing."17
51. In the celebrated case of Seaford Court Estates v. Asher18 , Lord Denning has succinctly summarized the principle on the role of the court. To quote: "Whenever a statute comes up for consideration it must be remembered that it is not within human powers to foresee the manifold sets of facts which may arise, and, ev~n if it were, it is not possible to provide for them in terms free from all ambiguity … A judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of the Parliament, and he must do this not only from the language of the statue, but also from a consideration of the social conditions which gave rise to it arid of the mischief which it was passed to remedy, and then he must supplement the written word so as to give "force and life" to the intention of the legislature …. Put into homely metaphor it is this: A judge should ask himself the question how, if the makers of the Act had themselves come across this ruck in. the texture of it, they would have straightened it out? He must then do as they 17 Corocraft Ltd v Pan American Airways Inc. [1968] 3 WLR 714 at 732. 18 [1949] 2 All ER 155 VIPULBHAI M. CHAUDHARY v. GUJARAT COOP. MILK 1035 MARKETING FED. LTD. [KURIAN, J.] would have done. A judge must not alter the material A of which the Act is woven, but he can and should iron out the creases."
52. In Rattan Chand Hira Chand v. Askar Nawaz Jung (Dead) by Lrs. and others 19 , this Court, at B paragraph-17 of the judgment, has also dealt with the principles in following words: "17 . … The legislature often fails to keep pace with the changing needs and values nor is it realistic to c expect that it will have provided for au contingencies and eventualities. It is, therefore, not only necessary but obligatory on the courts to step in to fill the lacuna. When courts perform this function undoubtedly they legislate judicially. But that is a kind of legislation which o stands implicitly delegated to them to further the object of the legislation. and to promote the goals of the· society. Or to put it negatively, to prevent the frustration of the legislation or perversion of the goals and values of the society. So long as the courts keep E themselves tethered to the ethos of the society and do not travel off its course, so long as they attempt to furnish the felt necessities of the time and do not refurbish them, their role in this respect has to be welcomed."
53. The cooperative society registered under the Central or the State Act is bound to function as a democratic institution and conduct its affairs based on democratic principles. Democratic functioning on G democratic principles is to be reflected in the respective Acts or Rules or Bye-laws both on the principle and procedure. If not, it is for the court to read the democratic 19 (1991) 3 sec 67 (2015) 3 S.C.R. A principles into the Act or Rules or Bye-laws. If a procedure is prescribed in any Act or Rule or Bye-law regarding election of an office bearer by the Board, as defined under Article 243ZH(b) of the Constitution of India, and for removal thereof, by way of a motion of no confidence, the B same procedure has to be followed. In case there is no express provision un,:ler the Act or Rules or Bye-laws for removal of an office bearer, such office bearer is liable to be removed in the event of loss of confidence by following the same procedure by which he was elected to office. c
54. Now that this Court has declared the law regarding the democratic set up of a cooperative society and that it is permissible to remove an elected office bearer through motion ,of no confidence, and since in many States, the D relevant statutes have not carried out the required statutory changes in terms of the constitutional mandate, we feel it just and necessary to lay down certain guidelines. However, we make it clear that these guidelines are open to be appropriately modified and given statutory shape by E the competent legislature/authority. Having gone through the provisions regarding motion of no confidence in local self-governments, we find that there is no uniformity with regard to the procedure and process regarding motion of F no confidence. Some States provide for a protection of two years, some for one year and a few for six months, to the office bearers in office before moving a motion of no confidence. However, majority of the States provide for two years and a gap of another one year in case one motion G of no confidence is defeated. Bihar Panchayat Raj Act, 2006 provides for a protection of two years and one year, Bihar Municipal Act, 2007 provides for a protection of two years and one year, Himachal Pradesh Panchayati Raj Act, 1994 provides for a protection of two years and two years, H Madhya Pradesh Panchayat Raj Avam Gram Swaraj VIPULBHAI M. CHAUDHARY v. GUJARAT COOP. MILK 1037 MARKETING FED. LTD. [KURIAN, J.) Adhiniyam, 1993 provides for a protection of two and a A half years, Madhya Pradesh Municipalities Act, 1961 provides for a protection of two years and one year, Manipur Panchayati Raj Act, 1994 provides for a protection of two years and one year, Orissa Panchayat Samiti Act, 1959 provides for a protection of two years, Orissa Grama B Panchayats Act, 1964 provides for a protection of two years, Punjab Panchayati Raj Act, 1994 provides for a protection of two years, Rajasthan Panchayati Raj Act, 1994 provides for a protection of two years and one year, Rajasthan Municipalities Act, 2009 provides for a protection C of two years and Uttar Pradesh Panchayati Raj Act, 1947, as followed by Uttarakhand, provides for a protection of two years and one year. Having regard to the set up in local self-governments prevailing in many of the States as 0 above, we direct that in the case of cooperative societies registered under any Central or State law, a motion of no confidence against an office bearer shall be moved only after two years of his assumption of office. In case the motion of no confidence is once defeated, a fresh motion E shall not be introduced within another one year. A motion of no confidence shall be moved only in case there is a request from one-third of the elected members of the Board of Governors/Managing Committee of the cooperative society concerned. The motion of no F confidence shall be carried in case the motion is supported by more than fifty per cent of the elected members present in the meeting.
55. Though for different reasons, we agree with the view G taken by the· High Court of Gujarat. The contra views expressed by the High Courts of Andhra Pradesh, Bombay, Kerala and Punjab and Haryana are no more good law in view of the Ninety Seventh Amendment to the Constitution A of India.
56. The appeals are accordingly dismissed. There shall be no order as to costs. Devika Gujral Appeals dismissed.